ICOs are limited-time offerings made via the Internet of digital “assets”, cryptocurrencies or tokens. Their use and eventual value are tied to projects that are only at an early stage, explained the AMF in a statement.

High-risk investments

The AMF says that ICOs are high-risk investments, and that investors who are interested in this market need to understand how ICOs work and that they could potentially lose the entire value of their investment.

"From the promising future of blockchain technology to the volatility of Bitcoin, so much has been said about cryptocurrencies that consumers are finding them increasingly difficult to understand," said Jean-François Fortin, executive director, AMF Enforcement. "If there's one thing to keep in mind, it's that if you're offered "guaranteed" profits, promised quick, high returns or rushed into making a decision, you're most probably dealing with a fraudulent scheme or, at best, an excessively risky investment."

Issuers and sponsors have legal obligations

The AMF also warned that “businesses that plan on issuing cryptocurrencies or tokens must understand and meet their obligations under securities laws. In particular, issuers and sponsors could be subject to prospectus and registration requirements.”